Wheat – Heeding Market’s “Message.”

Not everyone “believes” the market sends messages by reading its activity. [A “belief” about reality does not mean it is reality, except to the “believer.”]

When we recommended moving the stop up to 498, it was based on reading the activity from the day session of the 21st. It warned of potential weakness, but potential does not always translate into actual. Price could have rallied without retracing back to 498 in overnight trade, as it did.

Today’s activity shows that the “message” from Tuesday did show some weakness by virtue of the rally high close bar followed by the next bar, erasing gains to the high of the day, at least up until this point. The risk/reward was maybe 50/50, and a coin toss risk does not warrant the exposure.

Here is how we viewed Tuesday’s activity, and why it the initial sell stop was moved up to an acknowledged money stop.